Finding Middle Ground
Floor Speech
Mr. GARAMENDI. Mr. Speaker, I appreciate this presentation. We had one of those very important moments to recognize the long service of one of our colleagues.
As we listen to those eulogies, I think all of us should be reminded of the awesome responsibilities that we share here in the House of Representatives. Bill Young, obviously, felt those responsibilities deeply. He carried them out for an extraordinary length of time--43 years. We are thankful for his service, for his memory, and also for what he has taught us about perseverance and steadfastness and also, as you can tell from the various eulogies, about working across the aisle.
Working across the aisle and finding the middle ground is what I want to spend some time on tonight.
Like my 434 colleagues, when we finished voting last Thursday, we all left this Chamber, I think, in a rather somber mood, realizing that 16 days had passed and our government was shut down and there was the likelihood of damage to America and Americans.
When we got home, I suspect all of us--and I know this certainly was my case--were confronted by our constituents. They were not happy. In fact, they were angry. They were angry that their government--the government of the strongest, most powerful Nation in the world--wasn't operating because its legislative body had failed. And we had failed to find the common ground; we had failed to protect this Nation and Americans.
It was a grand debate over the Affordable Health Care Act, then it morphed into some other kind of concerns, and ultimately wound up somewhere about the deficit and about the default. At the end of that process, I don't think Americans really much cared what the debate was about. What they cared about was the very nature of our government and whether it would be able to operate.
It was a heavy toll. It was a heavy toll on our Nation. It is estimated it was well over a $24 billion hit to the economy; and I know in my own district, there was a tremendous hit. As I got off the plane here in Washington, D.C., as I was returning today from California, at the airport, ready to fly back to California, was the chancellor of the University of California-Davis. She caught me as I got off the plane, and she expressed her deep concern for the university and its operations.
Research projects that were under way simply stopped.
Sitting next to me on the airplane coming out was a woman who was running a health and nutrition program for the U.S. Department of Agriculture that was associated with the University of California-Davis. It was shut down for 16 days, and just the enormous challenge of shutting down and starting back up, the loss of efficiency and the lost research that took place.
Those kinds of problems are repeated throughout my district. At Travis and Beale Air Force bases, over a thousand civilian employees were furloughed. In Lake County, the county family service center which provides support for victims of child abuse, domestic abuse, and rape had to reduce its services.
As I mentioned, the University of California and the U.S. Department of Agriculture weren't able to operate. Farmers who needed to get loans at the service center couldn't get them--right in the middle of the harvest season. Companies that needed licenses from the Department of Commerce to export advanced technology had all of their orders on hold; and, undoubtedly, some of them were lost.
In the far north of California, the wildlife refuges were closed during the opening of the duck season and also the antelope and deer season. In my own district in Dixon, an annual ``stand down'' for struggling veterans had to scramble for money to cover the Department of Labor loan that was not made available. The Small Business Administration was unable to approve business loans.
The entire economy of the United States lost over $24 billion. The economic growth of the Nation probably lost as much as half a percentage point. And for what?
It is hard to even begin to describe what the argument was all about over the Affordable Care Act--an act that is now providing health care services to over 4 million young men and women who are able to stay on their families' health insurance, for seniors who are getting preventive health care services. It goes on and on.
But here we are, once again. We got past all of that. Where do we go tomorrow?
Well, tomorrow we begin once again the struggle to define this government's future and, really, to define the future of America. I am going to spend a few moments talking about that struggle because on January 15 there will be yet one more crisis point--a focal point upon which the issues of government will be leveraged one way or the other.
We have seen five such crisis points in the last 3 years, and each one a crisis building up to a point where the American economy doesn't know what to expect and therefore does not make the critical investments, does not attempt to grow, because they don't know what the economic and political future will be.
We are going to endure that not just once in the next 3 months, but twice. January 15 will be the first opportunity for the next crisis--a crisis that will be about opening government or not. Because, once again, it will be a funding crisis. Will we be able to appropriate the money to operate the Federal Government? Less than a month later, on February 7, there will be one additional debt crisis. Once again, a default cliff will be reached.
And so the American economy, like a racehorse at a gate, hearing the trumpet, looking for the gate to open, ready to get out there and charge down the track, the American economy will face once again that gate slamming shut on it. Even as it wants to grow, even as that great
American racehorse economy wants to head down the track, that gate has the potential of slamming shut. The uncertainty will be there once again.
We have got to end these fiscal crises. It is in the interest of Democrats and Republicans to end these manufactured crises and to put in place a long-term, stable policy that allows this government to make the critical investments to grow the economy, to put in place a tax policy that is sensible and long range and helps to balance the budget, that makes the necessary cuts to those programs that are not essential, and maintains and even enhances those that are essential.
Let me put up on the board just for a moment some of the numbers that we are dealing with over the next couple of months. I don't say this is the best chart. It is actually a bit confusing, but I think we need to try to understand the numbers.
This number, $1.203 trillion, was what President Obama suggested be the Federal budget for the year 2014. Back in 2010, the actual amount was $1.188 trillion. That is what we actually budgeted and spent that year. That was 2010. So there was some growth that the President recommended for the Federal budget.
What actually happened was quite different. What actually happened is down here in these lower numbers.
This year, the House Republican budget, otherwise known as the Ryan budget, called for $1.095 trillion, which is significantly under the President's budget. In 2011, the debt crisis came up once again and the August 2011 compromise said that we would spend $1.066 trillion in the 2014 budget. The Senate actually said we would spend $1.058 billion.
What did we actually do? What we actually did last week was to authorize an expenditure of $986 billion--a huge difference of some $217 billion less than recommended by the President.
What does this number mean? This number means that across this Nation vital programs in the military, vital programs in education, in health care, in agriculture, and in every activity of the government, except those of Medicare, Social Security and Medicaid, were substantially reduced. That put an enormous drag on the economy. So not only was the economy faced with a 16-day shutdown, but it was also faced with a shallow and less robust Federal Government, laying off people all across this Nation. For the University of California at Davis, it meant that $40 million of research programs were not funded. Simply stopped.
This kind of effect on the Nation's budget or the Nation's economic activity is going to continue. And in the year ahead, economists predict that it will continue to cause a slowdown in the growth of the economy, lowering tax revenues, actually increasing the deficit, and creating higher unemployment--or at least not reducing the unemployment rate in this Nation.
We need to change that. We need to set in place a different policy. And here is where I want to go with this discussion. What is it that we really need to do to grow the American economy, to make sure all of the rungs on the economic ladder are in place and providing the opportunity for every American to have a decent job?
Hardworking Americans want to go to work. They want to have a job where they can support their family, where they can meet their own personal and family needs and participate in their communities in a meaningful way with a good, middle class job. There are ways that we can do that. One of them is what we call the Make It In America agenda.
The Make It In America agenda involves seven different policies, such as international trade policies. Instead of giving away our jobs to some foreign country, making sure that our trade programs actually encourage economic growth at home, not encourage economic growth in China. Also, that there be a tax policy that ends unnecessary tax loopholes and rebates for those companies that are profitable. For example, of the top 20 American corporations, about half of them pay little or no corporate income tax. The tax system is set up in such a way that they are able to avoid their fair share of the cost of government.
So we need to make sure that the tax policies of the United States are wise, that they support economic growth, that they don't provide unnecessary tax breaks and loopholes to those individuals and corporations that don't need them. I will give you one example of such a huge tax loophole:
The five biggest oil companies in America together receive somewhere between $4 billion and $5 billion in reduced taxes every year. This is the most profitable industry in the world. Why are they getting subsidies? Why are we subsidizing them? Why is the American taxpayer subsidizing the most profitable industry in the world, the oil industry? This is just one example of tax subsidies, tax breaks, that ought to be removed and seriously looked at. We could significantly increase the revenue to the Federal Government by eliminating these unnecessary, unwise, and quite foolish tax breaks and subsidies that many corporations and some individuals receive.
Energy policy is extremely important. We need a wise energy policy. Right now, the United States is in the midst of an energy boom. It is reducing the cost of energy. All across this Nation, we are seeing the effect of this in the coal industry as natural gas is replacing coal-fired power plants, reducing greenhouse gas emissions. All of that is a very, very good thing. Also, we need to continue to move towards sustainable energy, the green energy systems--wind, solar, hydroelectric, geothermal--and other kinds of sustainable energy policies.
I am going to skip down here to research because this is where we have a real opportunity to tie together the research agenda with the energy agenda. An example:
We know that most of the oil that is produced in the United States and is imported is used for the transportation industry.
Recently, the Transportation Department provided a grant to the University of California at Davis to do some research on sustainable transportation. The world's top scientists have concluded that there really is such a thing as climate change and that it poses a very serious threat to humanity. The most recent report came out less than a month ago and concluded that we are in for some very serious troubles ahead unless we are able to reduce greenhouse gas emissions, particularly carbon dioxide, a good deal of which comes from the transportation industry.
The good news is that we as the American public, through this government, can rise to the challenge, and communities, like the one I represent in Davis, California, are leading the way. The University of California at Davis has received a cutting-edge research grant for the research into transportation systems that are sustainable and that are not relying as much or at all on the carbon fuels, gasoline and diesel. So what are they--plug-in hybrids? Alternative fuels such as advanced biofuels, hydrogen fueling infrastructure and many other kinds of transportation--batteries and the like--are going to be part of this research.
The Department of Transportation asked the University of California at Davis to lead the National Center for Sustainable Transportation. This new consortium will consult policymakers as they implement real-world strategies to address climate change and other threats. In other words, by combining research and energy, we can move away from the dependence upon oil, particularly foreign oil, reducing our greenhouse gas emissions. So, as you go through this Make It In America agenda, certainly energy policy will be coupled with the research agenda.
Another part of this is labor. Is labor ready to accept the kinds of challenges that we are going to find in the new, modern manufacturing sector?
We need to invest in labor so that we have a well-educated labor force, and we need to invest in the reeducation of those men and women who have lost their jobs. Just two decades ago, we had nearly 20 million Americans in the manufacturing sector. Today, it is probably closer to 11 million. That means some 9 million Americans who once had jobs in the manufacturing sector are no longer employed in that sector. They need to be reeducated either in advanced manufacturing technologies or in other sectors.
The labor force is constantly evolving, and one of the roles of the Federal Government through the Department of Education and the Department of Labor and Commerce is to provide that reeducation necessary as one of the old manufacturing technologies moves, dies out and as new ones come along so that the labor force is able to move into those new jobs. So you see the combination of education and labor. These things work together.
On the educational side, it has been shown many, many times that an education really needs to start prekindergarten; yet one of the effects of sequestration, together with the government shutdown, was a significant reduction in prekindergarten education. In my district, some 6,000 young people were unable to participate in the Head Start program, not just for 16 days but for the many days out ahead, so they will enter kindergarten substantially behind their peers, providing an anchor to the economy as they move through their educational process, quite possibly becoming one of the high majority or the high percentage of students who drops out of high school.
As you move down this Make It In America agenda, we come down to one that is a fundamental investment, and that is the infrastructure system. We have a very high unemployment rate. There is no doubt about it. One of the ways to immediately employ Americans is to build the foundation for economic growth. These are all part of the foundation for economic growth. This is the concrete and steel when we talk about infrastructure. These are the roads, the airports, the railroads, the mass transportation systems, the sanitation systems, the water systems. So infrastructure becomes a critical part of any of the efforts that we need to make to rebuild America, to provide the foundation and to put Americans back to work.
There is some very interesting research that has
come out of this, and here is a piece of it: for every dollar invested in infrastructure, $1.57 is pumped back into the economy.
So if, for example, the Federal Government were to undertake the robust infrastructure program that the President put forth a year ago and reiterated in his State of the Union speech this last February and if we passed legislation, as he wanted, to put $50 billion additional into the infrastructure program, the economy would not only be spending the dollar; it would be getting back $1.57 for every one of those $50 billion that the President wanted to put into America's infrastructure. Men and women would be working; the economy would begin to move forward more rapidly; and we would begin to see the kind of economic growth that this Nation needs to have, that the men and women who are unemployed or those who are seeking better jobs would want to have, and we would be laying the foundation for future economic growth.
We must keep this in mind. There are several things that could be done in this regard. One of them you just heard about during the brief interruption when the Rules Committee came here to put before this House tomorrow and in the days ahead the Water Resources Development Act. This used to be biennial legislation that Congress would pass every 2 years to put in place the water, resources, the development of levees, transportation systems, such as the locks and the rivers and the channels, the ports, other kinds of water transportation systems. You had water; you had sanitation systems; you had levees. All of these critically important infrastructure projects are in the Water Resources Development Act.
It has been 5 years since there has been a Water Resources Development Act, but we have a chance now to push forward in this House of Representatives in the next few days an extremely important infrastructure piece of legislation. The good news is there is a good chance we will do it. The bad news is it is inadequately funded. There is not sufficient money in that program to actually build the kinds of things that we must have.
So what are we going to do?
One of the solutions was again proposed by the President in his infrastructure program that he presented to Congress, which has really not been acted on yet--an infrastructure bank, a bank that has been in existence in Europe for almost 30 years now. It is a public-private partnership in which the government invests money and in which private investors can also invest. That money would then be available for those kinds of infrastructure projects that are cash flow projects--for example, a sanitation system, a toll road, a toll bridge, an airport, a water system. All of these kinds of infrastructures have fees associated with them, so there is a cash flow that is generated sufficient to pay off the loan that is made available through the infrastructure bank.
Such a program has been introduced here in the House of Representatives since at least the early 1990s. It doesn't exist--it has never been passed--although, every year, one or another Member of the House of Representatives has tried. I know Congresswoman Rosa DeLauro has introduced this for at least the last 15 years, but it has never been acted upon. You have to wonder why.
This seems to me to be eminently wise that we would create an infrastructure bank. The Federal Government can borrow money today. A 10-year note is just over, I think, 2.6 percent. That is really cheap money. Borrow that money. Put it in this bank. Loan it out at 2.8 percent to various cities, counties, water systems, and build the infrastructure. That is cheap money. It gives us a chance to get the economy growing, to employ people, to build the foundation for economic growth, and to raise taxes, not by increasing the tax rate but by people paying taxes because they are now working. What a novel idea--people who work pay taxes just as we ought to be doing. So these are a couple of ideas about how we can move the economy forward.
There is another piece of this Make It In America agenda, and it is this: H.R. 1524. I like this piece of legislation. It is one I have introduced. What it basically says is: if we are going to build those clean energy projects--the wind, the solar, the advanced fuel, the hydrogen systems--all of which are subsidized by your tax money, then your tax money must be spent on American made: American-made wind turbines, American-made solar panels. Let's Make It In America.
Why should we spend your tax money to buy steel from China to build the San Francisco-Oakland Bay Bridge?
I am sure your answer would be we shouldn't, but we did--6,000 new jobs in China, zero in America. It was supposed to be 10 percent cheaper. It turned out to be 10 percent more expensive because there were flaws in the steel; the welds were not satisfactory. No, no. That is American taxpayer money. That American taxpayer money should have been used to buy American-made steel and to create a new, high-tech steel mill not in China, which is what happened, but, rather, in America. We ought to be buying American. We ought to be using our tax money to buy American-made goods and services, and that is exactly what this bill does. This is part of the Make It In America agenda.
I am going to show you one other little picture here. Normally, our trains don't run upside down, so let me make it right-side up:
This is an electric locomotive--brand new, made in Sacramento, California, by Siemens, the German manufacturing company, which is one of the world's biggest manufacturing companies. Why in the world are they making electric locomotives for Amtrak in Sacramento? Why are they doing that?
For years, Siemens has had a light-rail trolley manufacturing plant in Sacramento. In the American Recovery Act--the stimulus bill--there was some $600 million for the purchase of 80 locomotives to replace the aging locomotives on the east coast Amtrak lines. Added to that $600 million was a sentence that said, this money had to be spent only on American-made locomotives.
Siemens looked at that and goes: Hmmm, we can make locomotives in America--and they did, in Sacramento, California. Probably a couple of thousand jobs, suppliers from all over the Nation providing the parts--the electrical systems and the rest--for this locomotive, made in America, with American taxpayer money, because someone in the stimulus bill added a sentence to an appropriation and said, this money must be spent on American-made locomotives.
We can do that with every one of our expenditures--or at least many of our expenditures--using your taxpayer money on American-made goods and services, a very, very wise thing to do, which, incidentally, was first suggested by George Washington and Alexander Hamilton. So if you want to go back to the Founding Fathers, use some of their ideas where they said--Alexander Hamilton in a report to George Washington said that the Federal Government should use its purchasing power to support American industry--buy American, Make It In America, use American taxpayer money on American-made goods and services. Not a bad idea. We need to pass that kind of legislation here.
I am going to take just a few more moments and talk about one of the great challenges that we have. I am going to start with this man who seemed to understand what it took to rebuild and to move the American economy and society forward. This is actually on one of the monuments at the Franklin Delano Roosevelt Memorial here in Washington, D.C. When I took my grandchildren down there not too long ago, I read this to them and explained to them why this was important during the Great Depression, and why it is important today.
Roosevelt said during the height of the depression that ``The test of our progress is not whether we add more to the abundance of those who have much, it is whether we provide enough for those who have too little.'' The test of our progress is not whether we add more to the abundance of those who have much, but rather it is we provide enough for those who have too little.
Most of us have an image of the Great Depression--the food lines, the hungry, the unemployed. America has gone through something not as desperate, but nearly so--the Great Recession, beginning in 2008. Millions of Americans lost their jobs--well over 8, maybe as many as 10 million. Even more lost their homes, and there was a lot of hurt upon our land.
We have been working now since 2008 to restore the American economy. The stimulus bill was one such way--the proposals of the President--to rebuild the American infrastructure, to educate our kids, and a host of other things, what he called the American Jobs Program--incidentally, not taken up by our colleagues here in the House of Representatives on the majority side. Nonetheless, he recommended different ways to address this fundamental issue.
How do we provide enough for those who have too little? How are we doing? How is America doing on meeting the challenge that Franklin Roosevelt laid out? The answer is seen in this chart and the answer is: not well at all. We are miserably failing to meet the challenge that Franklin Delano Roosevelt laid out during the Great Depression.
Here is what it is: of the economic growth from 2009 to 2012, the fraction of the growth that went to the top 1 percent--this is the new wealth that was generated by the American economy, the growth in the economy, the wealth, the growth in the economy--the top 1 percent got 95 percent of all of that wealth that was generated. The 99 percenters--99 percent of the American people--got to share 5 percent of the wealth that was generated by the economy.
This is a great tragedy. This is an unparalleled tragedy in the American economy. This is not just a 3-year period; this has actually been happening--not at the same horrible distribution that you see here--but it has actually been a phenomenon that has been going on in the American economy where the rich get richer and the great majority of Americans are standing still.
When I am not in my district and I hear people talk about their lives, they are talking about the fact that they are literally standing still economically. Poll after poll indicates that the American public knows and understands this. When asked how they are doing, they basically say they are just treading water, they are not moving forward, they are just doing the very best they can to hang on, to keep their nose above the water, to not go under.
We have to address this phenomenon. This doesn't happen because of the weather, it doesn't happen because of God or some other mysterious force. This happens because of policy, policy that this Congress, together with the Senate and even the Supreme Court and the President, put in place, a policy that is skewing the nature of the American economy in such a way as to add great wealth to those who already have great wealth and little to those who have very little.
We need to adopt policies to change this. On the floor of the House of Representatives, there should be a piece of legislation to raise the minimum wage. $10 is a bare minimum. California--my home State--did that, raised the minimum wage to $10 and then a couple of steps will go on in the future, a couple of higher steps. That is good, that is good for everyone, even those businesses small and large that are going to pay that higher wage. What it does is to share the wealth that is generated by this economy, providing those at the bottom, those hardworking men and women that are at the bottom, the opportunity to sustain their families, to sustain their livelihood. That is but one.
If we make those critical investments that create economic growth, particularly education and job training,
and put in place the programs that enhance manufacturing, we will see this begin to change, and we will see the 99 percenters begin to take their fair share of the wealth that they are generating. It is the men and women that toil, wherever they may be--in the Federal Government, in the State governments, in the manufacturing, in the fields of America--wherever they may be, those are the men and women that are creating wealth. I understand capital. It has a role in this, but capital and labor together. What we are seeing here is the men and women that toil are not getting the wealth that they helped to create.
This is a challenge. Tax policy is part of it. Policy such as minimum wage, the role of the labor unions putting pressure on the system so that the men and women that are working in those businesses are able to share more of that wealth. They are all part of this system, and we need to pay attention to it here on the floor.
So let's keep in mind the 99 percenters, who in the years 2009 to 2012 received 5 percent of the total wealth generated by the largest economy in the world--the American economy. Public policy means a lot.
Over the next several days, this Congress is going to deal with some profoundly important questions. The question of the role of the Federal Government--will we have another sequestration debacle on January 15? We could. The current sequestration, which the military is saying is a disaster for them, the education community, the research community, the transportation community, the health, the social welfare community, all say the sequestration is an unmitigated disaster.
They know, and the American public will soon know, that on January 15 the second shoe will fall and another $105 billion will be taken out of the economy beginning on January 15 unless this House of Representatives and the Senate, together with the President, come up with a viable alternative, one in which the growth of the economy can be assured, in which the continued austerity programs which are holding back an incredibly powerful resource called the American economy are put aside, and we put in place those policies that create economic growth. We have an enormous challenge.
Mr. Speaker, I yield back the balance of my time.
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